The most common uses for online data room software are M&A deals and due diligence processes and other business transactions that require the transfer of confidential documentation. This is particularly true for tech startups which’s growth and development is usually dependent on being acquired, either as a goal exit or as a milestone.

During M&A due diligence, all parties have to go through huge amounts of documentation in relatively tight timeframes. It is essential to select a virtual dataroom provider that has advanced security features and granular access rights. This will help you avoid losing valuable information. Look for features such as two-factor authentication and a timed expiration for access. Also, look for multiple levels of permissions for users and IP-based access restrictions. Check if the provider has certifications like ISO 27001, SOC 1, SOC 2, HIPAA and GDPR.

When selecting an online data room, you should take into account the size of your business and the amount of documentation you will be uploading and managing through the application. Startups tend to have fewer documents while larger enterprises require more advanced features. To meet your needs select a service that has a customizable interface, mobile apps for iOS and Android devices and batch upload capabilities as well as reporting on document activity, tagging and foldering, the possibility of searching by file type, and an option to create groups of users with varying permission levels.

Certain VDR providers, such as Brainloop Secure Dataroom, offer a free version of their service for small to medium-sized companies. Some VDR providers like iDeals and Merrill Datasite offer unlimited storage to all customers.